臺大管理論叢 NTU Management Review VOL.28 NO.3

149 NTU Management Review Vol. 28 No. 3 Dec. 2018 Given the distinct influences of corporate misconduct on a firm’s short-term and long-term value, incentive-based solutions prescribed by the agency theory may not solve the problems completely. As Eisenhardt (1989) suggests, using agency theory with complementary theories may be a supplementary way to address the complex relationship between CEOs and corporate misconduct. From the upper echelon perspective (Hambrick and Mason, 1984), the psychological assessment of CEOs helps to explain the motivation for business misconduct. For example, Blickle, Schlegel, Fassbender, and Klein (2006) found that some personalities of executives more likely cause white-collar crimes. Some literature using psychological reasoning suggests certain attributes of decision makers, such as their career horizon, would affect corporate decision making (Antia et al., 2010; Lee and Chang, 2014). In this vein, the study contends that the CEO career horizon is a determinant of corporate misconduct. In the following section, we combine insights from the upper echelons perspective with the previously mentioned agency theory to explore and analyze the effect of CEO career horizon on corporate misconduct. 2.1 CEO Career Horizon The decisions of individuals are considered associated with a wide range of motives, such as the need for achievement, affiliation, belonging, power, recognition, safety, social status, etc. (Donaldson, 1990; McGregor, 1960). However, the motives of individuals are strongly governed by their age and life experiences (Blau, Gustad, Jessor, Parnes, and Wilcock, 1956; Super, 1980; Roberts and Mroczek, 2008). The psychological and socio- psychological theorists believe that an individual’s attitudes towards a decision are affected by his/her personal characteristics (Aubert, 1952; Thornton and Dumke, 2005). For example, Green (1981) identifies age as one of the relevant influential factors associated with cognitive processes and decision-making. In line with this notion, scholars in business related fields argue that CEOs are also subject to the influence of their age. The upper echelons theory also suggests that the career stage and age of CEOs have substantial impacts on their decision horizon (Daboub et al., 1995; Hambrick and Mason, 1984). Empirical literature further proves that CEOs’ career horizons are profoundly associated with the time left before their retirements (Matta and Beamish, 2008; McClelland, Barker, and Oh, 2012; Oh, Chang, and Cheng, 2016); i.e., when CEOs are close to departing from their position, their career horizon will be shorter (Antia et al., 2010).